Tencent technology news on September 23, the game developer Epic Games v. Apple antitrust case did not end in an amazing way as many people expected, but quietly ended. Although nine of the ten charges were in Apple’s favor, the judge ordered apple to lift the restrictions that prohibit developers from linking to alternative payment systems in their applications, which in turn will allow them to avoid Apple’s controversial 30% commission mechanism and the app store’s complete dominance of IOS games. This in itself has a significant impact, but what happens next may be more significant.
This case may set a precedent for the numerous and larger antitrust lawsuits currently submitted to the court against apple, which may reshape the structure of the app store itself and redefine the way large technology companies around the world are regulated. In addition, it may fundamentally reshape the mobile game industry. Mikhail shyshla, development director of IDS group, a software development company, said: “this is of great significance to apple because their entire ecosystem is based on the fact that the app store.”
Since the launch of the app store in 2008, Apple has always built it as a “walled garden”, that is, a fully controlled application development space that provides security and millions of access opportunities for developers. Of course, these are charged. This fee has always been Apple’s “cash cow”, generating about $19 billion in revenue each year. If Apple’s walled garden is washed away by the anti-monopoly wave, it may have a variety of consequences, including forcibly changing their application development software, allowing the use of third-party application stores on their devices, providing new financing modes for applications, and allowing applications to be loaded from the side of alternative stores.
Although such a change will give apple a headache, it is an opportunity for video game developers to reshape the industry. Game companies will be able to make more profits from the deal without paying apple a commission. Therefore, the free model seems likely to be very popular, which has accounted for 75% of all application revenue. But more broadly, the adjustment of Apple’s 30% commission leaves more room for developers to explore different ways to make money.
Brian baglow, head of Scottish games network, a game industry organization, said: “for developers, this means that there will be all kinds of opportunities. As these lawsuits begin to cause more cracks in Apple’s’ walled garden ‘, developers can use such strategies more creatively and give them the freedom to experiment.”
Baglow takes adinmo as an example. The billboards produced by the company often appear in mobile games, with virtual avatars of various products in real life. There is also audio mob, which produces audio advertisements in the game. They are almost like radio advertisements and will not forcibly interrupt the game. Even Facebook has expanded into this area with playable ads.
Then subscribe to game services. With Apple’s App Store fully dominating IOS, the only important mobile game subscription service is apple arade. In this regard, Amazon Prime and Netflix have always operated well in the field of television and film, but they were screwed up by Apple’s 30% commission.
Changes in the way games or apps are advertised may seem trivial at the moment, but they will play an important role in the future of the industry. It is no coincidence that free games such as the division, fortrite and destiny are becoming more and more popular because they rely heavily on increasingly profitable micro transactions, booty boxes and game subscriptions. “This can create new ways for people to appreciate, enjoy and participate in applications, and give the next 1 billion mobile users reason to join in what is meaningful to them,” baglow said
But such changes are accompanied by risks. Historically, Apple’s walled garden has always been selling its safety, but with the collapse of the wall, this commitment is more difficult to fulfill. In short, maintaining security will become more complex if all developers are allowed to link to payment systems outside the app store and beyond Apple’s control. This is partly because these places are not under Apple’s control, but it is also the result of having to move data back and forth.
Grant goodes, chief scientist of digital security company guardsquare, said: “compared with the usual situation, these new revenue sources will increasingly rely on protecting the communication layer at a lower level. We usually have to protect water pipes, but to some extent, we also have to protect water droplets.” goodes stressed the issue of in-game currency, If hackers can imitate the basic code that makes up this currency, it is easier to illegally clone it.
Finding a balance between security, control and competition is the core of the legal dispute between apple and etic games. Now, there seems to be only one direction left. “I think this is the beginning of a longer story. Great changes have taken place in the antitrust field in the past five years,” said Jordan Ellison, a partner and antitrust law expert at slather and may law firm. Even the judge in epic case hinted that the antitrust lawsuit against the absolute control of Apple App Store had only partially failed, “Because epic didn’t pay too much attention to this topic.”.
To understand what might happen next, just look at South Korea’s actions. In August this year, South Korea passed a new telecommunications law prohibiting app stores from monopolizing payment. Therefore, apple is now in a stalemate with South Korea over restoring fortress night to its app store. Just a few weeks later, the South Korean competition regulator also announced plans to impose a fine of 207.4 billion won (about US $175 million) on Google on suspicion of preventing other smartphone manufacturers from using other operating systems. A few months ago, Apple was fined 100 billion won ($84.49 million) on charges of forcing telecom companies to pay for TV advertising and mobile phone warranty.
In the face of increasingly aggressive regulators, apple and Google are increasingly likely to face more fines if they do not change the structure of their app stores. However, this change is not easy to make. “Such antitrust litigation has more room for success in European law,” Ellison said. He explained that this is part of a broader change in the regulation of large technology companies, as many countries are turning to regulation and antitrust enforcement rather than relying on companies to supervise themselves.
Compared with the contest between epic and apple, the most important duel against Apple’s app store is actually being staged in the EU. In April this year, the European Commission accused Apple’s app store of taking a 30% commission in violation of its antitrust regulations. This Commission applies to music apps such as spotify, but not Apple music. The European Commission said this gave apple a greater financial advantage than its competitors.
From epic to South Korea to the European Union, Apple’s control of IOS is now facing greater challenges than ever before. It remains to be seen how the app store will change and how such a change will affect companies that rely on it. However, although so far, the walled garden of the app store has provided certainty and stability, and there are still many questions about alternative options, this is also an opportunity for new ideas to emerge. Baglow said: “we have just started, which can not be completed by any imagination.” (reviewed by Tencent technology / Jinlu)